- Florida led the nation in attracting high-income households, with a net increase of 27,500 between 2020 and 2021.
- The lack of state income tax and a shift towards outdoor lifestyles during the COVID-19 pandemic are cited as driving factors.
- Texas and North Carolina follow Florida as states with the largest net influx of high earners.
Florida solidified its status as the top destination for America’s high earners in a recent study, leading the nation in attracting high-income households, with a net increase of 27,500 between 2020 and 2021. The study cited the lack of state income tax and a shift towards outdoor lifestyles during the COVID-19 pandemic as driving factors.
According to financial technology firm SmartAsset, despite rising living costs, Florida’s appeal grew considerably in the midst of pandemic lockdowns between 2020 and 2021. The Sunshine State boasted a net gain of 27,500 high-income households in the 2021 tax year. With the broader trend of remote work and an emphasis on outdoor living, Florida’s stance during the pandemic appeared to bolster its allure, but the growth continued beyond that time frame, too.
From July 2021 to July 2022 alone, a staggering 444,500 people relocated to Florida. The state’s policy of not levying an income tax was highlighted as a key motivator in the study.
Across the U.S., high-income household numbers swelled in 2021, with 8.68 million tax returns reflecting earnings above $200,000, marking a growth from 8.57 million the previous year. Such migrations can notably impact a state’s financial health and tax revenue.
Texas and North Carolina took the second and third spots respectively. Texas welcomed 22,751 new households with high incomes, whereas North Carolina saw an inflow of 11,437.
In contrast, Washington, D.C. experienced a sharp exodus of high earners, with a net loss of 2,009 households in the same period.
The Southeast emerged as a prominent region for high earners. Seven of the top 20 states in the category, including Florida, North Carolina, and Tennessee, are located in the Southeast.
Interestingly, while states like California and New York reported large outflows of high-income households, they continue to house a significant portion of America’s wealthy, with over 7.2% of their tax base comprising individuals earning over $200,000 annually.
SmartAsset’s study involved a comprehensive examination of tax data from all 50 states and the District of Columbia, focusing on households with an adjusted gross income of at least $200,000.